April 10, 2002

IMF to review Malawi's performance

The International Monetary Fund (IMF) representative Girma Begashaw told Malawi that the IMF could not release any of the US $58 million in Poverty Reduction and Growth Facility (PRGF) funding promised to Malawi - apart from an initial US $8 million in December 2000 - because a review of Malawi's economic reform programe had not been completed.

Many of Malawi's donors, who have for the most part withheld aid to the country, have waited for signals from the IMF before deciding whether to recommit themselves. Although there are no organisational links between donors such as the European Union or DANIDA (Danish Aid) with the IMF, most of the donors do not release their money without an OK of the IMF. In late February the British government reiterated in Lilongwe that it would continue to withhold at least US $18,6 million until the IMF approved the country's macro-economic policy.

Begashaw told IRIN that an IMF mission would be in Malawi from the end of April to early May and would hold meetings with the Malawian government. He said: "We had an IMF mission here from 25 February to 7 March ... they are coming back and they will do another assessment. When they go back [to the US] they will submit a report to the IMF executive board, based on that report a decision will be made on whether to disburse [the next tranche of the PRGF]." Whether donors choose to follow the IMF cue was not up to the IMF, Begashaw said. (IRIN)

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